Here are some smart ways to survive the current economic crisis

Ghana’s economy is plunging at an alarming rate. The country’s debt has reached an unsustainable rate, its currency (the cedi) is crashing, inflation is at 20-year high – prices of food, fuel, water, and electricity are all in a race for space.

Although the economic indicators are not as bad yet as they were in the mid-1990s when inflation crossed 40%, economic watchers fear the repercussion of the current crisis might be more dire than what happened in the early 1980s that resulted in a famine in Ghana.

While there isn’t much you can do about the deteriorating economy, you can plan and come up with your own austerity measures to save you some money, protect your investment and help you get through these hard times.

This is the time to up your game in managing your finances in smart ways. The priority should be on the basics, essentials, necessities, whatever you choose to call it – food, shelter, and health care.

Stock up on food, if you can afford to buy your fresh veggies in bulk to last you a few weeks, it’s cheaper that way.

For your grains – rice, maize, etc., don’t think twice – buy more to last you for months, if you can afford it.

If you live in your own home, God bless you but if you live in a rented space, start thinking about paying another rent advance, if you have the money.

Put away some money for any health care emergency. This is very important.

Don’t move if it isn’t necessary. Fuel prices have seen a drastic increment and they will continue to rise in the short- to mid-term.

Unless it is an emergency or extremely necessary for you to drive, don’t move that car. Using public transport isn’t an option either – transport fares are moving in tandem with fuel prices.

And if you have to drive because of work/business, it’s time to do some math – will that ‘move’ earn you more than you will spend on fuel for that same trip? Advise yourself accordingly.

If you have plans of hosting any social function, be it a wedding, funeral, party, etc., put a tight cap on the number of guests you invite.

A crowd does not mean success. And if you have been invited to such functions, you don’t need new shoes or clothes, make use of what you already have, at least until things normalise.

Slash your budget for entertainment. Having fun doesn’t always have to be outside your home. You can bring the fun home, it’s cheaper.

This is not the time to be sowing big seeds at your place of worship. God himself knows times are hard.

Instead, identify a vulnerable or needy person whose main worry is where their next meal will come from and help them.

The fact that you should cut spending doesn’t mean you should save either. This is not the right time to pile up hard cash, especially cedi-denominated, under your pillow or at the bank. I won’t ask you to convert your cedi into a more stable currency either, say to buy dollars or euros. That will aggravate the cedi’s woes.

Rather, for professionals who have been saving towards a project – let’s say to build or furnish a house – this is the time to buy whatever materials your savings can afford.

Don’t wait to have the amount for all materials in full before you make a move.

Bear in mind, the rate at which prices are surging will definitely make nonsense of your estimate for those materials.

For traders, another smart way is stock up on inventory, and if you are into manufacturing secure more raw materials.

Of all your business’s capital, liquid capital i.e. cash, bank deposits, etc. must be at its lowest possible. Keep only, in cash, just about what you will need for any unforeseen emergency.

If you deal in non-perishable goods, you are not limited as to how much inventory you can hold. The sky is the limit so long as you can afford to get there.

But, remember it generally takes a longer time for you to sell off non-perishable goods in times of crisis.

For dealers in fast-moving consumer goods (FMCGs), you are probably moving into a season of high demand more so when Christmas is around the corner.

In times of crisis, demand for basic FMCGs is at its highest so stock up all you can but be mindful of the products with expiry dates.

Wherever you choose to put your money, use this little trick. At any given time, your investment should earn you an interest equivalent to or more than the current inflation rate.

If your investment is fetching you anything below 37.2% (the current inflation rate) you are technically making a loss on your investment.

It is fine if you have already locked your money in a fixed deposit, treasury bill, or a bond with a much lower interest than current inflation rate. Make sure to consider some of these things the next time you invest.

That said, this is the time to be extra vigilant about where you put your money. Beware of investment schemes promising extremely high interest rates. You might be a loser in the end.

Finally, if you are an employee, this is the time for you to work harder so your name never comes up when your employer decides to lay off some workers to stay in business.

If you run your own business, take it as your religion and treat your customers as your God.

If you are unemployed, I pray the current hardship stirs up the spirit of entrepreneurship within you to come up with a service that will be highly sought-after.
If you have family and friends who support you, bless them; if no one supports you, don’t curse…everyone is struggling too.

By Raju J. R. Parwani

The writer is a business development expert and a business owner